A cap on payday loan interest is being proposed in Missouri. The proposed law has two legal cases filed against it. No lender in Missouri could charge more than 36 percent interest on any loan. Source for this article: Lawsuits begin over potential Missouri payday advance cap
Missouri explores payday loan interest limit
Several accuse payday lenders of every little thing from predatory lending to extortion. Some states in the United States have banned payday loans altogether while others have capped the interest loan companies are allowed to charge. The Columbia Daily Tribune says that there is a measure on the ballot in Missouri giving Missourians the option to vote on caps on payday loans, loans on auto totals or any loan to 36% interest. OzarksFirst.com says that currently capped payday loans are already in 17 states. The federal government has also capped payday loans and all other loans lent to active duty military personnel at 36 percent.
Both sides of the argument
Several signatures are still required in order to get the bill on the ballot. There are legal actions challenging the bill. 2 actions in the Missouri courts are challenging the wording used in the proposal. Interestingly the two lawsuits were filed by two groups on opposite sides of the argument. The lawsuit filed by the group that is pro-payday loan wants the bill to state what the expense to the economy of Missouri will be if the bill passes, says the StLousToday.com site. The second, filed by proponents of the bill, contend that the estimated cost to the state of $8 million per year should be revised. The contention of 20 cities or more in Missouri that the cap on payday loans would not impact any city and their economies.
Cash advance caps not unusual
A majority of states have some sort of cash advance regulation. The Nashville Leger claims that 32 states have some kind of regulation, 17 states with caps and 15 with bans. Payday loans are even regulated in some cities through laws that are meant for zoning. Texas’ Austin is thinking of using zoning to regulate the loans in their city, states YNN. Austin’s proposal is that these types of loans must be at least 500 feet from a highway that is considered major and 200 feet away from a residence. This law is necessary according to the city council in Austin to protect the individuals who are vulnerable economically. Short term loan companies are popping up everywhere, including banks. NASDAQ claims that direct deposit loans or loans against your next paycheck are now being offered by United States Bank and Wells Fargo.
Information from
Columbia Daily Tribune
OzarksFirst
StLouisToday
Nashville Ledger
NASDAQ
YNN
